Ottawa Turns To The Internet To Reach Canadians As Advertising Dollars Move Online

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For the first time, Canada’s federal government has spent more money advertising online than on television and radio, new data shows.

According to Public Services and Procurement Canada’s annual report on advertising, digital media accounted for nearly 55% — $16.8 million — of the $30.6 million the federal government spent on advertisements for the year ended March 31, 2017. It’s the first time that the Internet has surpassed television as Ottawa’s advertising medium of choice.

The $16.8 million spent on digital media was up 62% from $10.3 million spent in online ads during the previous fiscal year, when digital accounted for just 34% of the federal government’s advertising spend. Television ad spending, meanwhile, slid to $6.3 million or 20.3% of total expenditures, down from $15.3 million and 50% of spending the previous year, states the report.

Other traditional platforms used for advertising such as radio, newspapers and magazines saw some additional spending, although each category accounted for less than 10% of total advertising expenditures by the federal government. Ottawa spent about $2.6 million on radio ads, $2.4 million advertising in newspapers, $1 million at cinemas and $500,000 on magazine advertisements.

The new data is a marked change from the past. A decade earlier, in 2007, only 7% of Ottawa’s advertising expenditures went to the Internet. Back then, the vast majority of ad dollars were spent by Ottawa on television and radio ads. The drastic shift reflects how the internet has restructured the entire advertising industry, say analysts.

“The government is just mirroring what’s happening in the private sector,” Scotiabank analyst Jeff Fan said in a note to clients. “It is widely expected that more of the future shift will be at the expense of traditional TV, which would include not only advertising revenue, but also subscription revenue,” he wrote.

For its part, the federal government said it changed its tactics to reach Canadians where they spend their time: online.

Digital ads are a cost-effective way to reach the nearly 90% of Canadian households that have Internet connections, according to the federal report. Canadians “use digital technologies in their daily lives and expect the government to embrace these means to communicate with them,” states the report. “Digital advertising is also an efficient way to reach specific audiences with messages tailored to questions relevant to them.”